QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK General We are exposed to market risk, including fluctuations in interest rates and foreign currency exchange rates. Our primary market risk exposure occurs because we generate a portion of our revenues in foreign currencies, mainly in euros and incur a portion of our expenses in foreign currencies, mainly in NIS, but also in euros and other foreign currencies. As more fully described below, commencing in 2022, we engaged in currency-hedging transactions intended to reduce the effect of fluctuations in foreign currency exchange rates on our financial condition and results of operations. However, there can be no assurance that any such hedging transactions will materially reduce the effect of fluctuations in foreign currency exchange rates on such results. In addition, as of December 31, 2025, we had cash and cash equivalents, including short-term and long-term bank deposits and short- and long-term marketable securities, of $460.6 million. As of that date, approximately 85% of our cash, cash equivalents, bank deposits and marketable securities are held by Radware Ltd. in Israeli or U.S. financial institutions. The majority of our cash and cash equivalents, and short- and long-term bank deposits are invested in banks in Israel and, to a smaller extent, in banks in the United States. The Israeli bank deposits are not insured, while the deposits made in the United States in excess of insured limits are not otherwise insured. If one or more of these financial institutions were to become insolvent, the loss of these investments would have a material adverse effect on our financial condition. Exposure to Interest Rate Fluctuations As of December 31, 2025, approximately 19% of our cash throughout the world was invested in fixed-income securities which are affected by changes in interest rates. Interest rates are highly sensitive to many factors, including governmental monetary policies and domestic and international economic and political conditions. These securities are readily available for sale and are treated as such in our financial statements. Consequently, our investments are exposed to risks relating to a fluctuation in interest rates, which may affect our interest income and the fair market value of our investments. This is because an increase in market interest rates could have an adverse effect on the value of our investment portfolio, for example, by decreasing the fair values of the fixed income securities that comprise a substantial majority of our investment portfolio. Similarly, in a declining interest rate environment, borrowers may seek to refinance their borrowings at lower rates and, accordingly, prepay or redeem securities held earlier than initially expected. This action may cause us to reinvest the redeemed proceeds in lower yielding investments. Our investments portfolio consists primarily of investments in foreign banks and government debentures, corporate debentures, U.S. government and bank deposits. As of December 31, 2025, approximately 19% of our portfolio was invested in corporate debentures, 0.4% in foreign banks and government debentures and the rest of the funds were invested in bank deposits and money market funds. Although we believe that we generally adhere to conservative investment guidelines, the continuing turmoil in the financial markets may result in impairments of the carrying value of our investment assets. Realized losses in our investments portfolio may adversely affect our financial condition and results. Any significant decline in our investment income or the value of our investments as a result of falling interest rates, deterioration in the credit of the securities in which we have invested, or general market conditions could have an adverse effect on our results of operations and financial condition. We currently have no debt. 123 Exposure to Currency Fluctuations Approximately 87% of our sales in 2025 were denominated in dollars or are dollar-linked, and we incur most of our expenses in dollars, NIS, and euros. We believe that the dollar is the primary currency of the economic environment in which we operate. Thus, our functional and reporting currency is the dollar, and monetary accounts maintained in currencies other than the dollar are re-measured into U.S. dollars in accordance with ASC 830 “Foreign Currency Matters.” Changes in currency exchange rates between our functional currency and the currency in which a transaction is denominated are included in our results of operations as financial income (expense) in the period in which the currency exchange rates change. We monitor our foreign currency exposure and periodically use currency forward contracts to mitigate the impact of fluctuations in USD/NIS exchange rates on our forecasted cash flows. As of December 31, 2025, we had outstanding currency forward contracts totaling approximately $7.8 million to hedge a portion of our anticipated NIS‑denominated expenses through March 31, 2026. For 2026, however, we have hedged only a very limited portion of our anticipated exposure. Consequently, we expect that the continued weakening of the U.S. dollar relative to the shekel during 2026 will materially increase our NIS‑denominated operating costs. This trend is expected to have a significant adverse effect on our results of operations and, in turn, negatively impact our net income for the year. Our revenues and expenses may be affected by fluctuations in the value of the dollar as it relates to foreign currencies, mainly the NIS and Euro. For example, if there were no changes in the average exchange rates of the dollar relative to the NIS and Euro in 2025 compared to the average exchange rates in 2024, our revenues would have been lower in an amount of $1.4 million, and our expenses would have been lower by an amount of $2.6 million. Assuming our revenues and expenses in 2025 remain at the same level and with the same currency mix as in 2025, a 10% weakening in the value of the dollar relative to all currencies in which we operate would result in an increase in revenues of approximately $3.7 million and an increase in our expenses of $13.7 million. The following table presents information about the changes in the exchange rates of the U.S. dollar relative to the NIS and Euro: U.S. dollar against: Year ended December 31, NIS Euro 2021 (3.3 )% 8.4 % 2022 13.2 % 6.1 % 2023 3.1 % (3.6 )% 2024 0.6 % 6.3 % 2025 (12.5 )% (11.3 )% 124